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In the crowded business of smartphone and tablet apps, the
money might not be in building apps from scratch, but in flipping
them.

One way to get started is with Apptopia, a Cambridge, Mass.-based startup
that enables developers, businesses and investors to buy and
sell apps in online auctions. The site, which launched in
April, provides everything from valuation to escrow services
and intellectual property transfer.

“Essentially what we’re trying to do is broker mobile app
acquisitions in an eBay style,” says founder and COO Jonathan
Kay.

There are other online app markets, including SellMyApplication.com, but Apptopia is
among the most developed conceptually and is particularly
helpful in shepherding users through the sales process.

The idea is to create a Web win-win. Developers can turn their
code into cash and entrepreneurs can find ready-made online
businesses that they can then turn around and sell again.

There are a number of issues Apptopia aims to address. First, Kay
and his co-founder, Apptopia CEO Eliran Sapir, noticed
entrepreneurs spending money to build apps that already exist.
Meanwhile, developers are constantly looking to unload their apps
-- even apps with lots of downloads. Not every developer is a
born entrepreneur and many aren’t interested in the
administrative end, including the time it takes to support a
successful app.

“If they could get four or five thousand dollars that’s awesome
because it helps fuel the project they’re excited about now,” Kay
says.

To start bidding, users simply sign up with their email address.
The rest will be familiar to anyone who has bought items on eBay.
Users fill out a profile, browse listings of apps and then place
bids on the ones they want to buy, starting with a minimum bid
set by the seller. In some cases, apps can be bought outright for
a set price.

The average Apptopia purchase hovers around $7,500, but many apps
are available for much less. Potential buyers don’t even need a
login to navigate the site, which is searchable by category,
downloads, bid price and monthly revenues. Shoppers can then view
statistics about their potential purchases, which are updated
daily.

The data is easy to read, but interpreting the numbers is the
real trick. Good apps might appear to perform poorly because they
are relatively new or because they’ve been marketed poorly.
Others might be legitimate fixer-uppers. Ultimately, buyers have
to rely on their best business sense before taking out a flyer on
an app.

What to do with an app once it's purchased is up to the new
owner. Jean-Marie Truelle, a New York-based investor, uses
Apptopia to buy apps for his own bootstrapped mobile publishing
company, JMT Apps. The real magic to Apptopia, he
says, is how it simplifies the crowded app marketplace.

Making money on apps can be a tricky business, but Apptopia makes
it at least theoretically possible for the smallest investors to
get started. Savvy entrepreneurs can buy a niche app, figure out
what needs to be improved and find a talented mobile developer to
execute those changes, Kay says.

“You’re buying an asset with some revenue stream. … It’s unlikely
that you will lose your entire investment,” he says.